European Union Considers Employing Algorithms To Detect Anti-Competitive Behavior

Fresh on the heels of releasing its own more restrictive privacy regulations, the EU is now considering going a step further and using algorithmic methods to identify anti-competitive behavior (such as Google's and Facebook's dominance of internet advertising as an example) - and then punish and curtail it. JL

Foo Yun Chee reports in Reuters:

The European Commission’s inquiry into e-commerce found that two-thirds of retailers use algorithms to track their competitors’ prices. There is debate whether the creators and users of such algorithms can be held responsible for such collusion. EU regulators may set up their own algorithms to find companies that use software to fix prices with peers or squeeze out their rivals. "We would like to have our own algorithms out there, looking into the market, figuring out if there has been collusion taking place.”
EU regulators may set up their own algorithms to find companies that use software to fix prices with peers or squeeze out their rivals, Europe’s antitrust chief said.

The comments by European Competition Commissioner Margrethe Vestager underline the unease among policy enforcers about technologically-advanced tools such as computer algorithms that make it easier for companies to collude without any formal agreement or even human interaction.
The European Commission’s inquiry into e-commerce last year, for example, found that two-thirds of retailers use algorithms to track their competitors’ prices.
There is debate whether the creators and users of such algorithms can even be held responsible for such collusion.

Vestager said she had commissioned a study into the issue in order to upgrade her antitrust toolbox.
“It is a hypothesis that not all algorithms will have been to law school. So maybe there is a few out there who may get the idea that they should collude with another algorithm who haven’t been to law school either,” Vestager told a conference organized by the Belgian Competition Authority.
“So of course, we would like to have our own algorithms to be out there, looking into the market, figuring out if there has been collusion taking place,” she said.
In a speech last year, Vestager, who can penalize companies up to 10 percent of their global turnover for breaching EU rules, said she may levy bigger fines against companies that use software to enforce their cartels more strictly.

Reporting by Foo Yun Chee; Editing by Mark Potter

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